Cobra Financing

[rokndad]

Originally Posted by jwd

Here's my advice. NEVER, I repeat NEVER finance a toy. If you can't afford to pay cash, you don't need it. Unless your house and other cars are paid off as well as all your bills, you could put the money to better use. Probably not what you wanted hear.

Jim

You must be in another tax bracket. I'm retired and still owe $$ on two homes and will until I die. Why give it all to the IRS? And I get to upgrade my lifestyle with a nicer house at the beach, nice garage, nice toy(s) with a little bump in the monthly payment spread out over another 30 years. I'm most likely not going to be here in 30 years, and can afford the payments that I've gotten used to since we first got married. You afford what you can afford. Kids higher education over with, so I moved onto something else.

I say, rather than don't finance something at all, finance smartly what you can afford while maintaining the lifestyle you want to have. Family certainly comes first, but us hardworking Dads deserve some rewards for our sacrifices before we can't bend over to pick up a wrench, right? Never say never.

[jwd]

Your second sentence is very sad. Fortunately, my homes and properties were paid off over 5 years ago as are all my cars, toys, etc. I retire next year at 55 YO. As to "giving it all to the IRS" please explain how it makes sense to pay $10,000 in interest only to deduct $3200 from your taxes. To me, you just lost $6800.

Jim

[csx4910]

Not wanting to particiapte in the argument of whether you should(that is no one's business but yours) Capital one does financing up to $50000 for used or classic cars. I used them for a 67 mustang I purchased a while back and was very happy with them.

Whether or not you should finance like with anything else would depend on the interest rate, amt etc. Others are right that if you did a part of home equity it would be tax deductible. This was 2006 but Capital one with putting down 20% I believe my interest rate was 7-8% for 3 yrs.

It would be great if everyone had their house and cars paid off but that is just not reality for most of us. I say life is too short not to enjoy it and if you can afford it - go for it, just figure in the interest you will pay into the amount of money (plus some) you will lose when you sell.
Ron

[patrickt]

Originally Posted by jwd

As to "giving it all to the IRS" please explain how it makes sense to pay $10,000 in interest only to deduct $3200 from your taxes. To me, you just lost $6800.

Of course it makes no sense (financially speaking, that is)... and he is probably laboring under the mistaken belief that the federal estate tax is somehow going to take all his money when he dies. Really, all he's doing is lowering the amount of money that he will be leaving his kids, or his wife, or the church, or the Society for Krishna Consciousness, or whatever. But that's certainly his right, so long as he fully understands what he is doing. Actually, it's his right even if he doesn't understand what he is doing -- and perhaps that's the case here.

[jhv48]

I watched my dad scrimp and save his whole lifetime (he was raised in the Great Depression years and had to scrounge for whatever he needed). He is now worth a bundle and aside from travelling all over the world many times over, has rarely indulged himself. To him, money in the bank is security. He intends to pass it all down to his heirs.

I am from a different school of thought. I am part of the "you can have it all" generation, and believe that as long as you have put enough away for your retirement years, you have the right to enjoy the fruits of your labor. I also plan on accessing my home equity via a reverse mortgage should I need the money in my home to survive comfortably in my golden years. My house is a giant piggy bank, and as long as it is used wisely, can be a great source of security.

My family has been well provided for with life insurance. If I have spent every last dollar in my estate, they will all have a healthy amount of money to pursue their dreams, and it will be 100% tax free (unless the Dems decide to tax life insurance proceeds to help balance their outrageous spending).

So, if you have met all your financial obligations and choose to borrow the funds to buy/build a Cobra, have at it. It is your money after all.

[elmariachi]

Originally Posted by jhv48

So, if you have met all your financial obligations and choose to borrow the funds to buy/build a Cobra, have at it. It is your money after all.

And if you haven't met all your financial obligations and choose to buy a Cobra (or finance it) its still your decision as well. Some of us are fortunate enough to be able to write a check, others need alternatives. In the end, everyone deserves to enjoy things, regardless of the means.

[mtml427]

Originally Posted by jhv48

I watched my dad scrimp and save his whole lifetime (he was raised in the Great Depression years and had to scrounge for whatever he needed). He is now worth a bundle and aside from travelling all over the world many times over, has rarely indulged himself. To him, money in the bank is security. He intends to pass it all down to his heirs.

I am from a different school of thought. I am part of the "you can have it all" generation, and believe that as long as you have put enough away for your retirement years, you have the right to enjoy the fruits of your labor. I also plan on accessing my home equity via a reverse mortgage should I need the money in my home to survive comfortably in my golden years. My house is a giant piggy bank, and as long as it is used wisely, can be a great source of security.

My family has been well provided for with life insurance. If I have spent every last dollar in my estate, they will all have a healthy amount of money to pursue their dreams, and it will be 100% tax free (unless the Dems decide to tax life insurance proceeds to help balance their outrageous spending).

So, if you have met all your financial obligations and choose to borrow the funds to buy/build a Cobra, have at it. It is your money after all.

I see little wrong with financing a car. Just make sure you separate the car and the car loan from your other assets (no home equity loans for a car purchase). You may be able to stomach the loss of a car but to lose your home because extending on toys would make little sense.
Check with Hagerty. They are able to finance some and may have knowledge or who else to contact. Also, we belong to a credit union that does finance some re-creations.
As to the above quote regarding hoping to tap into to equity via a reverse mortgage: It has been a major topic of discussion recently that the next debacle will be the direct result of reverse mortgages. People will be complaining they didn't realize they would out-live their reverses and find themselves homeless. So guess what, we'll have to bail out another bunch of morons.

[patrickt]

Originally Posted by mtml427

Just make sure you separate the car and the car loan from your other assets (no home equity loans for a car purchase).

Now how is he going to do that? With a non-recourse loan secured solely by the asset itself? Impossible. If he gets behind on his car loan they will re-pop his car and go after him for the deficiency (and that means going after anything he owns that's worth a shi!). But I know what you're saying, don't take out a second mortgage to buy a toy and then when you can't make the payments they foreclose on your home.... I couldn't agree more.

[rokndad]

Originally Posted by patrickt

Of course it makes no sense (financially speaking, that is)... and he is probably laboring under the mistaken belief that the federal estate tax is somehow going to take all his money when he dies. Really, all he's doing is lowering the amount of money that he will be leaving his kids, or his wife, or the church, or the Society for Krishna Consciousness, or whatever. But that's certainly his right, so long as he fully understands what he is doing. Actually, it's his right even if he doesn't understand what he is doing -- and perhaps that's the case here.

I'm not laboring under anything, and as long as I must have a mortgage, I'll allow the Tax Codes to give me some relief. You don't know what my or anyone else's financial situation is and can only speculate, out loud, as you have.

As far as responsible financing and living your life to its fullest within your means, check the rest of the responses herein. Be happy. Life's too short to be snarly all the time. Let's stay on point and not derail the intent of this thread for the original poster and hope he gets to enjoy one of these great cars.

[Dwight]

If it's titled as a 2005 Ford, Cobra, assembled car, whatever, I can get it financed at my Credit Union. I just need an appraisal stating the valve. And because it less than 5 years old I get a good interest rate. I borrowed money on my Cobra so I could build a shop on my land. NO Mortgage. They can have the Cobra and I can keep the shop.

Both are paid for now.

Dwight